Groupon Reimagines Its GrouponWorks Site, But Does Groupon Really Work?

Groupon announced today that it has revamped its GrouponWorks.com site for merchants. The company says it has been redesigned to better showcase merchant successes, as well as Groupon's toolkit of marketing products and services. It features cases studies and video testimonials like the one below.

“GrouponWorks.com ties together Groupon’s entire suite of merchant products, services and resources and helps business owners select the tools that meet their needs,” said Sanjay Gupta, VP of Merchant Marketing at Groupon. “Best of all, visitors can listen to merchants—in their own words—share unique accounts of how working with Groupon had a positive impact on their businesses.”

Interestingly, the GrouponWorks redesign comes at a time when a story about a business shutting down, and blaming Groupon is getting some attention. The Atlantic reports that Back Alley Waffles in Washington D.C. is blaming Groupon for making them wait three months to get paid (three months from the opening of the restaurant), and ultimately fostering the business' demise. The Atlantic's Rebecca Greenfield reports:

In April Craig Nelsen opened up Back Alley Waffles in the Shaw neighborhood of Washington and did what lots of new small business owners do: put a deal on Groupon offering $16 worth of waffles for $8. The way this works is that people pay Groupon their $8 and then take a certificate to redeem at Nelsen's waffle house. The money comes later from Groupon (which usually takes a 50 percent cut). The promotion was very popular. So popular that there are many reports that customers would show up to a sign at the front door saying they had run out of Waffles and the staff was running out to Safeway to get more ingredients. But unlike other businesses who have been blindsided by their Groupon deal's popularity, Nelsen was more than happy to make more waffles, but he ran out of money.

If you go to BackAlleyWaffles.com, you're greeted with a message telling you that it is "close indefinitely due to the bloodthirsty business practices of Groupon. Waffles are now $450 each by appointment only."

Update: Additionally, the company gave us this statement from Groupon Spokeswoman Julie Mossler:

"Mr. Nelson initially approached Groupon and our merchant advisors structured a deal to best encourage overspend and help his business grow. We also required Back Alley to cap the number of Groupons sold to ensure the feature was in the best interest of both consumers and the merchant. We scheduled his feature on his terms, on a date he selected, under a contract he reviewed and signed. According to our records, only 132 Groupons, or 18% sold, have been redeemed since Back Alley ran two months ago, and Mr. Nelson has received 2/3 of his share of the revenue to date. We always hate to hear that a local business has decided to close, but the math does not point to Groupon as the cause."